ExamVeda
Login
Home

International Finance and Treasury MCQ Questions and Solutions with Explanations | Management

International Finance and Treasury MCQ Questions and answers with easy and logical explanations. Management provides you all type of quantitative and competitive aptitude mcq questions with easy and logical explanations. International FinanceMCQ is important for exams like MAT, CAT, CA, CS, CMA, CPA, CFA, UPSC, Banking and other Management department exam. Page-3 section-6

Each section contains 100 MCQs on International Finance and Treasury .
21
For other non-price conditions, increase in equilibrium interest rate leads to
Discuss
Answer & Solution
Answer: Option D
Solution:
For other non-price conditions, increase in equilibrium interest rate leads to decrease restrictiveness.
22
If risk of financial security increases and supply curve shifts to left then impact on equilibrium of interest rate must
Discuss
Answer & Solution
Answer: Option B
Solution:
If risk of financial security increases and supply curve shifts to left then impact on equilibrium of interest rate must increases.
23
Markets in which derivatives are traded are classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
Markets in which derivatives are traded are classified as derivative securities markets. Derivative Securities Markets. Derivative securities (also called derivatives) are financial contracts whose values are derived from the values of underlying financial assets (such as securities).
24
Consider buying of put option, probability that a buyer would have negative payoff increases with the
Discuss
Answer & Solution
Answer: Option A
Solution:
Consider buying of put option, probability that a buyer would have negative payoff increases with the increase in stock price.
25
Price of an option is subtracted form time value of option to calculate
Discuss
Answer & Solution
Answer: Option C
Solution:
Price of an option is subtracted form time value of option to calculate intrinsic value. Intrinsic value refers to an investor's perception of the inherent value of an asset, such as a company, stock, option, or real estate. Knowing an investment's intrinsic value is useful for value investors who have a goal of buying stocks and other investments at a discount to this amount.
26
If intrinsic value of an option is $450 and price of an option is $560 then time value of an option is
Discuss
Answer & Solution
Answer: Option A
Solution:
Time value of an option = Price of an option - Intrinsic value of an option
= $560 - $450 = $110.
27
Type of swaps in which fixed payments of interest are exchanged by two counterparties for floating payments of interest are called
Discuss
Answer & Solution
Answer: Option B
Solution:
Type of swaps in which fixed payments of interest are exchanged by two counterparties for floating payments of interest are called interest rate swaps. An interest rate swap is a type of a derivative contract through which two counterparties agree to exchange one stream of future interest payments for another, based on a specified principal amount. In most cases, interest rate swaps include the exchange of a fixed interest rate for a floating rate.
28
Preferred stock is considered as hybrid security because it includes
Discuss
Answer & Solution
Answer: Option D
Solution:
Preferred stock is considered as hybrid security because it includes representation of ownership interest and fixed periodic payment.
29
Situation in which large portion of majority is borrowed from broker of investor is classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
Situation in which large portion of majority is borrowed from broker of investor is classified as leveraged investment. Leveraged investing is a technique that seeks higher investment profits by using borrowed money. These profits come from the difference between the investment returns on the borrowed capital and the cost of the associated interest. Leveraged investing exposes an investor to higher risk.
30
A swap that is used to evade risk of exchange rate exists because of currency mismatching is classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
A swap that is used to evade risk of exchange rate exists because of currency mismatching is classified as currency swaps. A currency swap is an agreement in which two parties exchange the principal amount of a loan and the interest in one currency for the principal and interest in another currency. At the inception of the swap, the equivalent principal amounts are exchanged at the spot rate.